AD #2218 – Honda Zeros In On Hips and Ankles, VW Diesels Get a Thumbs Up, GM Earnings Drop Drastically
October 24th, 2017 at 12:01pm
Runtime: 7:56
0:31 VW Diesels Get a Thumbs Up
1:05 Toyota’s Traffic App for Taxis
2:17 Honda Zeros In On Hips and Ankles
3:24 Continental & Argus Tackle Cyber Security
5:10 GM Earnings Drop Drastically
6:37 FCA Sees Big Profit Jump
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On today’s show…Volkswagen gets some good news about its diesels…Honda reveals the ideal seating position to make a car feel sporty….and GM and FCA post their latest financial numbers. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show produced exclusively for those who want a better understanding of what’s going on in the global automotive industry.
VW DIESELS GET A THUMBS UP
Volkswagen just got some good news regarding its diesel scandal. Reuters reports that the EPA and California Air Resources Board have approved a fix for SUVs equipped with its 3.0L diesel. This means the company won’t have to buy back around 38,000 vehicles which will save it at least a billion dollars. Older models will get software and hardware updates while newer models only need software fixes. VW is still waiting for a fix to be approved for its passenger cars equipped with 3.0L diesels.
TOYOTA’S TRAFFIC APP FOR TAXIS
Yesterday we showed you a new purpose built taxi from Toyota that it developed for the Japanese market. And now it has created a new service to help taxi drivers in Tokyo avoid traffic back-ups. Available through its TC Smartphone Navigation app, it alerts drivers about congestion including lane-specific information. It analyzes driving video and vehicle data from the company’s TransLog driving recorder that’s installed in 500 taxis in the Tokyo area. And if users want more detail about an affected area, they can tap the display to pop-up a photograph of the area. Toyota will begin a trial service in Tokyo starting next spring.
It is possible to make a hack-proof car? We’ll show you the latest attempt right after this.
HONDA ZEROS IN ON HIPS AND ANKLES
One of the reasons why SUVs and Crossovers sell so well is that people like sitting up higher. In the industry, the term is having a higher hip-point, or H-point. But with the new Accord, Honda went in the other direction. It lowered the H-point, but it also lowered the heel point. Juni Yamano, the chief engineer on the Accord, says that the key to delivering a sporty feel in driving a car is getting the proper relationship between the hip-point and the heel-point. The seating position on the Accord was lowered by 25 millimeters, while the heel point was lowered by 15 millimeters. Honda calls this “Oneness” so that the driver feels one with the car.
Don’t forget to join us for Autoline After Hours this Thursday. It will be all about the Accord. We’ll have Ray Mikiciuk, who heads up sales and Steve Rodriguez who will talk all about how they manufacture the car. Here’s your chance to take a deep dive into all the new features on this car.
CONTINENTAL & ARGUS TACKLE CYBER SECURITY
People are scared of hackers taking control of their cars. So Continental and Argus Cyber Security are showing how they can harden a vehicle to make it more difficult for hackers. It starts at the component level, making sure all the modules have protection built into them. From there the system monitors the vehicle to detect any intrusions. If it detects a command that doesn’t make sense, it will block it. On top of that, a security center will receive continuous health reports from the vehicle. Big data analytics will review threats and patterns to ensure an entire fleet of vehicles is not at risk. If there is, an over-the-air software update with a security patch will be sent to the vehicle. It then triple checks the update to make sure it’s coming from the security center and installs the new patch. The auto industry knows it cannot make a hack-proof car. But with early detection and quick mitigation, it can frustrate hackers and minimize any attacks.
GM and FCA posted their latest earnings, and there’s a lot to learn from the numbers. That’s coming up next.
GM EARNINGS DROP DRASTICALLY
General Motors and FCA reported their third quarter earnings this morning, and here’s our report card on how they performed. We’ll start with General Motors. It sold 2.2 million vehicles worldwide from July through September, about the same as it did last year. But these numbers include Opel, whose sales are down 70% since GM sold its European operations to PSA. GM’s revenue came to $33.6 billion, down nearly 14%, which is mostly due to downtime in North America as the company worked on reducing its heavy inventory of vehicles. It posted an operating profit of just under $2 billion, a big drop from a year ago. And it earned a net income of only $100 million dollars from continuing operations, down nearly 96% from last year. That was mainly due to a $2.3 billion charge related to taxes regarding the sale of Opel. Here’s our Autoline Insight. On the face of it, this looks like a terrible quarter for General Motors. But the stock market will probably react favorably. GM is now profitable in all global segments for the first time in a long time. And once it gets the Opel sale behind it, it will put a lot more money to the bottom line. And because the stock price is a reflection of how the market thinks it will perform in the future, it will likely keep GM’s stock price moving up.
| GENERAL MOTORS Q3 2017 EARNINGS | ||
|---|---|---|
| Sales | 2.2 Million | – |
| Revenue | $33.6 Billion | -13.5% |
| Operating Profit | $1.9 Billion | -61.3% |
| Net Profit | $100 Million | -95.8% |
| Source: General Motors | ||
FCA SEES BIG PROFIT JUMP
Now let’s turn to FCA. It sold 1.1 million vehicles worldwide, the same as last year. But the company is drastically reducing its fleet sales in the U.S. market, which are down to 11% of total sales versus 21% last year. The company brought in €26 billion, down 2%, but its earnings before interest and taxes came to €1.7 billion, up 17%, and it posted a net profit of €910 million, up 50% from a year ago. FCA’s industrial debt level actually increased slightly due to foreign exchange, which is going to complicate the company’s goal of eliminating that debt by the end of next year. One thing that is clear from these numbers is how heavily dependent FCA is on North America. Two-thirds of its operating profit comes from NAFTA.
| FCA Q3 2017 EARNINGS | ||
|---|---|---|
| Sales | 1.1 Million | – |
| Revenue | €26.4 Billion | -2% |
| EBIT | €1.75 Billion | +17% |
| Net Profit | €910 Million | +50% |
| Source: FCA | ||
And with that we wrap up today’s show, thanks for watching and please join us again tomorrow.
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Comments (12)
October 24th, 2017 at 12:31 pm
John, get back to us after you’ve driven the new Accord; one inch hip and 3/5′s inch heel doesn’t sound like much, but who knows, maybe it is a big deal. Just stirring the pot a little.
October 24th, 2017 at 12:32 pm
John have you heard any rumblings that GM may be looking to dissolve Buick in the next few years as well?
Honda seating; its hard to believe that a change of 10mm from hip to heal (@ 3/8″) makes that much difference especially when drivers height vary allot and many seats have some height adjustability.
October 24th, 2017 at 12:49 pm
@2 – Lambo2015
Interesting thought because Buick sales are pretty flat in North America.
Initial reaction to GM dropping Pontiac during its flirtation with bankruptcy was that it would make way more sense to drop Buick. But the higher powers knew that the Chinese market loves David Buick’s products. GM could eliminate the brand in NA but definitely not in China.
Also, the sales in NA just add more volume – and likely pure profit – to GM’s bottom line.
October 24th, 2017 at 12:56 pm
re. Chuck Grenci, from yesterday:
My trip was trouble-free, with a few slow-downs/stoppages, as usual. I drove the Mini; after the last few road trips in the ‘Vette, I decided something “different” would be fun. Both cars are comfortable for me, seat-wise. I’d kind of forgotten how slowly the Mini accelerates at high speed, as it seems reasonably quick in town, using the lower gears. Of course, compared to the ‘Vette, most cars are slow.
I’ll miss having the ‘Vette here, but I’ve missed having the Mini here the last two winters.
The difference in mpg for the 1100 mile trip is surprisingly small, about 29.5 for the ‘Vette, and 34.5 for the Mini. In short, low speed trips, the Mini gets almost twice the mileage of the Corvette.
October 24th, 2017 at 2:30 pm
RS I said the same back when they were talking about eliminating Pontiac. Realistically GM only needs Chevy and Caddy. Buick products are either Opels or rebadged GMCs. Which is another redundant brand. Everything sold by GMC has a Caddy or Chevy version. So if you keep GMC make them the only place for trucks and SUVs ands let Caddy and Chevy have the car and CUV segments. All these multiple versions of the same vehicle is what helped get them in trouble in the 1st place. They are competing with themselves and diluting each brand.
October 24th, 2017 at 3:10 pm
Back when I was buying Chevrolets because the Oldsmobiles and Buicks were more expensive I was wondering the same (whether they were just rebadged Chevy’s). Well, after switching to Oldsmobile, I sure did see a difference in vehicles; the trim didn’t fade as fast, ride was quieter and the niceties were appreciated. When Pontiac yielded the performance market to Chevrolet, they became a redundant mark and probably needed to go. Agreed, that there were too many same type vehicles but I do think theat there still is room for Buick. Chevrolet moved up and made Oldsmobile redundant, and Buick, if Cadillac ever makes the final push to Luxury, will still fit the near luxury segment. Just some random thoughts from a GM guy for these many years.
October 24th, 2017 at 3:37 pm
#5 I agree! and was really disappointed to see the closing of Pontiac. But when the dealers demanded to have a minivan in their line-up they diluted the brand. That was the brand for icons like GTO, firebird, Trans Am, Tempest, Lemans even Fiero had it lasted another year. Then in 97 they offered the Montana minivan and in 2000 something only a mother could love the Aztek. Even their sad attempt at bringing back the GTO which looked like a more rounded Chevy lumina. Made the loss easier to swallow. Pontiac lost its way and no doubt Buick is trying to fit between the Chevy and Caddy brand but that’s becoming a small gap to fill. Just don’t be surprised when another brand is axed. I wouldn’t be surprised if GM launches their own EV brand.
October 24th, 2017 at 5:26 pm
Should get rid of Cadillac – big $$ for a mediocre vehicle. I suffered with two of them – and no support from Cadillac. Bye Bye from me!
October 24th, 2017 at 6:32 pm
Nice try Honda, but what us baby boomers want is to NOT have to lower ourselves into a vehicle or contort ourselves to fit your “sporty” mobile, but to be able to slide into the seat with minimum amount of bending of the legs and body. This also applies to vehicles that sit too high, us BBs don’t want to have to hike up running boards just to get to the seat. Work on making the seat at our standing butt level by maximizing adjustability of the vehicle ride height and you’ll sell plenty of vehicles to the BB generation.
October 24th, 2017 at 9:42 pm
For 2018, Buick has something rare in the U.S. market, a wagon but, disgustingly, it has mandatory AWD.
October 25th, 2017 at 8:41 am
Kit what’s wrong with AWD? Yea that tourer X wagon looks like Volvo with a Chrysler grill.
October 25th, 2017 at 9:07 am
AWD adds weight and complexity, and hurts fuel economy. I didn’t need AWD, even when most of my driving was in the “snow belt,” and I certainly don’t need it now that I never drive in ice and snow.
Yes, I know tbat AWD doesn’t hurt fuel economy a lot, but it’s the principle of the thing.